Google will buy a 5% stake in AOL the two companies will work more closely together as follows:
● Gets to sell Google search ads adding to the portfolio of advertising offerings the media giant has to sell
● Will make their IM software work with Google
● Will work with Google to digitize and search through Time Warner’s massive video archives
● Will ensure AOL appears in appropriate search results (should we be concerned?)
● Gives AOL a $300 million advertising credit
The loser here is Microsoft as the company first started courting AOL and Google swooped in at the last second and stole the deal. Google has a great deal to offer and AOL is already making a bundle by displaying Google ads on its site. Google too attributes 10% of its revenue to AOL this year. We are talking about huge numbers here and this partnership is good for consumers in my opinion as it strengthens Google and AOL/Time Warner and keeps Microsoft one step behind.
I would imagine that AOL and Google’s VoIP offerings will soon interoperate as well. This is good new for VoIP users and perhaps bad for eBay/Skype.